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Why do you want to trade?
You may be comfortable accepting the fact that
you don’t know everything there is to know about trading yet, but
you definitely should have a good idea about several things when you
get into trading. The first is why you want to trade in the first
place. People have a number of motives for trading, all of which
have merit, but you should be clear what it is that is driving you
into trading. Your reasons for trading may go a long way in
determining your trading style.
Profits
Probably every trader’s goal is to make money.
But if that is your main reason for trading, are you willing to do
what it takes to achieve this goal? It will mean you have to provide
the seed money and other resources you need to be successful, and it
will involve a commitment to learning to gain trading experience.
If trading is going to be your business, you
obviously have to put making money high on your list of goals. That
requires consistent, strong discipline and the ability to control
your emotions as none of the experience or success you have gained
in other areas will guarantee that you will be a success in trading.
Your trading approach may even be boring, but if your real goal is
making money, you will have to have the discipline to stick with a
trading plan.
Being ‘right’
Are you a person whose greatest satisfaction
comes from being right about things? Traders generally love to
compete and be better than everyone else in whatever they do. Just
having the opportunity to crow a little about their prowess is their
biggest reward.
However, trading may be one of the worst places
to look to feed an ego. Whatever success you have had in other
aspects of your life may not transfer very well to the trading
arena, which has been known to humble even the strongest ego. Of
course, traders have to have a strong sense of ego to have enough
confidence to trade, but you’ll have to keep that ego in check
whenever you enter a market position if you want to survive as a
trader.
Excitement
Trading certainly can provide plenty of
excitement, both highs and lows, and that may be reason enough for
trading. But expect to pay an entertainment tax. Just being in a
market position can be exhilarating and can inspire you to keep up
with what’s happening in the market and in the world’s news events.
However, to be successful over a longer term – unless you have deep
pockets – you usually will have to forego the excitement and emotion
generated by trading, just as you have to keep a lid on your ego
trip. You naturally will experience some excitement whenever you are
trading, but it is a factor you must control. If excitement is an
objective of trading for you, perhaps the solution is to have one
account you trade conservatively and another account where you get a
little wilder.
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Knowing What
You Don’t Know
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Why Do You
Want to Trade?
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What Are Your
Resources?
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Developing a
Trading Mentality
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The Language
of Trading
Main Trading
Resources Section |
